Question

THIS IS A BUSINESS LAW PROBLEM!!!

Does the dissolution of a partnership differ from the termination of a partnership? If so how? Give examples.

Answer 1

Dissolution of partnership occurs when one party leaves the business due to resignation, death or expelled by other party. The settlement must be initiated and settled by both parties else matter goes to court. Example: Maruti and Suzuki had partnership in India. Later on, Suzuki left the business and company name changed to Maruti from Maruti-Suzuki

Termination of partnership occurs when operation ceases or as per IRS rule, it is terminated when more than 50 percent of assets are sold within 12 month period. Example: Company A and B are in partnership and formed "AB Group". In case, the company gets closed, the partnership is terminated immediately

In case of dissolution, partnership remains active even when other party leaves which is not in the case of Termination.